11/10/2013

Good morning,

Yesterday exuberance of markets lifted the S&P500 +36.12 (+2.18%) to 1692.55, Nasdaq +82.97 (+2.26%) to 3760.75 and the DOW +323.09 (+2.18%) to 15126.10. The positive market sentiment had contagious effects on Asian Markets: Nikkei closed at 14404.7, +210.03 (+1.48%), in Hong Kong the Hang Seng gained +289.08 points at 23240.4 (+1.26%) and the ASX200 in Australia went up +87.73 points at 5230.87 (+1.63%). US President Barack Obama and House Republican leaders likely will reach an agreement to increase the debt ceiling and thus the market got this expectation as a catalyst for the best performance in many months for several indices.  Without going into politics the “fiscal impasse solution” will transfer risk on the US sovereign debt and the only way to make cheap sovereign liabilities will be through inflation (there is no doubt that the next FED Chairman Yanet Yellen likes the printing press). Market operators had forgot however that the partial government shutdown is lasting more than the average shutdown period and this is not going to be cost free for the US economy. In Europe this morning at 07:44 GMT the DAX index is up just 15 points (+0.16%) at key level 8700 and in UK the FTSE100 is up +0.33%, or 22 points at 6448. In the currency market the EurUsd is above 1.35 at 1.3557 (+0.28%), the UsdJpy is trading at 98.33 (+0.19%) and the GbpUsd is struggling to reach 1.6 and is trading at 1.5995 (+0.18%). Precious metals are uncorrelated today. Gold is up +0.35% at 1292 $/ounce and Silver is down -0.38% at 21.59 $/ounce. Important data releases today in US: Retail Sales (12:30 GMT) and Michigan index (13:55 GMT). Likely to see intraday volatility for the Canadian Dollar because at 12:30 GMT will be released the unemployment rate.